Pay Transparency Goes Primetime: Sweeping New Federal Legislation Proposed in Congress

New proposed legislation in the U.S. House of Representatives would require all employers nationwide – regardless of size or number of employees – to include the wage range in all job postings, provide wage ranges to applicants, and provide wage ranges to existing employees for their positions.  Representative Eleanor Holmes Norton (D-DC) introduced H.R.1599, the “Salary Transparency Act,” on March 14, 2023.  The Salary Transparency Act has been referred to the House Committee on Education and the Workforce.  

This bill has three main requirements that would apply to both public and private employers:   

Pay Scale Disclosures Would be Required in Job Postings

If passed, this bill would require all job postings to include the wage or wage range applicable for the position being posted. The definition of wage range in this bill includes “the range of wages or salaries and other forms of compensation” that the employer anticipates it will rely on “in good faith” when setting the pay for a position.  This pay scale posting requirement extends to both internal and external job postings.    

The bill allows for quite a bit of flexibility in how an employer could define the wage range for positions being posted. The employer could: 1) reference any applicable pay scale; 2) use a previously determined wage range for the position; 3) use the actual wage range for those currently holding equivalent positions, or 4) use the budgeted amount for the position.   

Wage Range Would be Provided to Applicants

This bill mandates that, in the event an applicant was not provided with the wage range for a position, employers would be required to provide the wage range to an applicant prior to discussing compensation.  Employers would also be required to provide the wage range to an applicant upon their request.

Existing Employees Would be Entitled to the Pay Scale for Their Position

Under the Salary Transparency Act, existing employees would be permitted to obtain the wage range for their position at any time upon request.  The law would also require the wage range be supplied to employees at the time of hire and annually thereafter. 

The options are slightly narrower for how employers would be able to determine existing employees’ pay scale. Employers could reference 1) any applicable pay scale, 2) a previously determined wage range for the position, or 3) the wage range for incumbents in equivalent positions. 

Retaliation, Statutory Penalties and Attorney’s Fees

As with many of the state and local pay transparency laws currently in effect,1 H.R. 1599 would prohibit an employer from retaliating against an applicant for employment or existing employee for exercising their rights under this bill.  Employers would also be prohibited from refusing to interview, hire, employ or promote an individual merely for exercising their rights under this bill. 

Violations of the Salary Transparency Act would subject an employer to a civil penalty of $5,000 for a first violation, which could be increased incrementally by $1,000 for subsequent violations and ultimately capped at $10,000 per violation.

H.R. 1599 would establish a new private right of action for applicants and employees who experience a violation of this law.  The statutory damages range from $1,000 to $10,000, or actual damages, whichever is greater. Attorney’s fees and injunctive relief also would be available to applicants and employees under this bill.

The Salary Transparency Act would permit a lawsuit against an employer to be maintained in any federal or state court.  Actions could be brought on behalf of individual applicants or employees or on behalf of other employees or applicants for employment who are “similarly situated.”  

Representative Norton also introduced H.R.1600, the “Pay Equity for All Act of 2023,on the same day she introduced H.R. 1599.  This Pay Equity for All Act would prohibit prospective employers from inquiring about candidates’ prior salaries and benefit history, or relying on said history in considering their employment or determining wages (unless a counteroffer scenario arises and prior wages are used as a justification.) An employee or prospective employee could seek special damages not to exceed $10,000, plus attorneys’ fees on their own behalf and on behalf of others similarly situated.  A penalty not to exceed $10,000 could also be assessed for violations of this bill.  Like H.R. 1599, an action for redress under this proposed law may be filed in any state or federal court.  This bill has also been referred to the House Committee on Education and the Workforce.

While the ultimate passage of either of these bills is uncertain, the introduction of such pay transparency legislation at the federal level indicates this trend will likely continue.

We will be tracking this legislation closely and updating you on the status of H.R. 1599 and H.R. 1600 throughout this legislative session.

See Footnotes

1 See, e.g., Joy C. Rosenquist and Denise M. Visconti, Show Me the Money: California Enacts New Pay Disclosure Requirements, Littler Insight (Oct. 5, 2022); Eli Freedberg, Thelma Akpan and Liran Messinger, New York Becomes the Latest State to Require Salary Transparency in Job Postings, Littler ASAP (Dec. 28, 2022); Jennifer Harpole and Luke Gilewski, Washington State Issues Final Policy on Pay Transparency in Job Postings, Setting Most Stringent Requirements in the Country, Littler Insight (Dec. 16, 2022); Josh Kirkpatrick and Jennifer Harpole, Colorado Issues Final Rules on Equal Pay for Equal Work Act with Significant Job Posting Requirements for All Employers with Colorado Workers, Littler Insight (Nov. 13, 2020).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.